business plan of a nightclub

This sample business plan has been made available to users of Business Plan Pro®, business planningsoftware published by Palo Alto Software, Inc. Names, locations and numbers may have beenchanged, and substantial portions of the original plan text may have been omitted to preserveconfidentiality and proprietary information.

You are welcome to use this plan as a starting point to create your own, but you do not havepermission to resell, reproduce, publish, distribute or even copy this plan as it exists here.

Requests for reprints, academic use, and other dissemination of this sample plan should be emailedto the marketing department of Palo Alto Software at [email protected]. For productinformation visit our Website: www.paloalto.com or call: 1-800-229-7526.

Copyright © Palo Alto Software, Inc., 1995-2010 All rights reserved.

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by_________________________ in this business plan is confidential; therefore, reader agrees not todisclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this business plan is in all respectsconfidential in nature, other than information which is in the public domain through other meansand that any disclosure or use of same by reader, may cause serious harm or damage to_________________________.

Upon request, this document is to be immediately returned to _________________________.

___________________Signature

___________________Name (typed or printed)

___________________Date

This is a business plan. It does not imply an offering of securities.

Table of Contents

Page 1

1.0 Executive Summary.............................................................................................................................1Chart: Highlights ......................................................................................................................1

2.0 Company Summary.............................................................................................................................22.1 Start-up Summary ......................................................................................................................2

Table: Start-up Funding ..........................................................................................................3Chart: Start-up .........................................................................................................................4Table: Start-up .........................................................................................................................5

2.2 Company Ownership .................................................................................................................53.0 Services................................................................................................................................................54.0 Market Analysis Summary ..................................................................................................................6

4.1 Market Segmentation ................................................................................................................6Table: Market Analysis ...........................................................................................................7Chart: Market Analysis (Pie) ..................................................................................................7

4.2 Target Market Segment Strategy .............................................................................................84.3 Service Business Analysis........................................................................................................8

4.3.1 Main Competitors..........................................................................................................94.3.2 Business Participants.................................................................................................10

5.0 Strategy and Implementation Summary ..........................................................................................115.1 Marketing Strategy ..................................................................................................................115.2 Sales Strategy..........................................................................................................................13

5.2.1 Sales Forecast ............................................................................................................13Table: Sales Forecast.................................................................................................13Chart: Sales Monthly ...................................................................................................14Chart: Sales by Year ...................................................................................................14

5.2.2 Daily Revenue Forcast ...............................................................................................146.0 Management Summary ....................................................................................................................15

6.1 Management Team .................................................................................................................166.2 Management Team Gaps .......................................................................................................166.3 Personnel Plan .........................................................................................................................17

Table: Personnel ...................................................................................................................197.0 Financial Plan ....................................................................................................................................19

7.1 Important Assumptions............................................................................................................19Table: General Assumptions ...............................................................................................20

7.2 Break-even Analysis................................................................................................................20Table: Break-even Analysis .................................................................................................20Chart: Break-even Analysis .................................................................................................21

7.3 Projected Profit and Loss .......................................................................................................21Chart: Profit Yearly ................................................................................................................21Chart: Gross Margin Monthly ...............................................................................................22Chart: Gross Margin Yearly..................................................................................................22Table: Profit and Loss ..........................................................................................................23Chart: Profit Monthly .............................................................................................................24

7.4 Projected Cash Flow ...............................................................................................................24Chart: Cash ...........................................................................................................................24Table: Cash Flow ..................................................................................................................25

7.5 Projected Balance Sheet ........................................................................................................26Table: Balance Sheet ...........................................................................................................26

Table of Contents

Page 2

7.6 Business Ratios .......................................................................................................................27Table: Ratios .........................................................................................................................28

Table: Sales Forecast ...............................................................................................................................1Table: Personnel ........................................................................................................................................2Table: General Assumptions ....................................................................................................................3Table: Profit and Loss ...............................................................................................................................4Table: Cash Flow .......................................................................................................................................5Table: Balance Sheet ................................................................................................................................6

The Nightclub

Page 1

1.0 Executive Summary

The Nightclub will be the premier, high-energy, themed dance and nightclub in Waldport,YourState. Our goal is to remain a step ahead of our competition through an exemplary serviceprovision. We expect our guests to have more fun during their leisure time. We will providemore video and electronic technology per square footage than anyone else in the region. Asimple, yet unique, themed menu and atmosphere will create a sense of 'belonging' for locals andtourists alike. Our operating credo is: "happy enthusiastic employees create happy enthusiasticguests."

The main objectives of the development of this new venue are:

· Capitalize on excellent location opportunity with swift commitment to the new TownSquare development.

· To launch the venue with a highly publicized grand opening event in the summer of Year1.

· To maintain tight control of costs, operations, and cash flow through diligentmanagement and automated computer control.

· To maintain a food cost below 33% of food revenue.· To maintain a total beverage cost below 25% of beverage revenue.· To exceed $3 million in annual sales by the fourth year of plan implementation.

The keys to success in achieving our goals are:

· Provide exceptional service that leaves an impression.· Consistent entertainment atmosphere and product quality.· Managing our internal finances and cash flow to enable upward capital growth.· Strict control of all costs, at all times, without exception.

The Nightclub

Page 2

2.0 Company Summary

The key elements of The Nightclub's concept are as follows:

1. Entertainment and dance based themes -- The company will focus on themes thathave mass appeal.

2. Distinctive design features -- The Nightclub will be characterized by the elaboratedance club situated in a spectator setting which comfortably accommodates 350guests. The area will also offer three private sky boxes which can be combined for usein a conference or private party setting. This room is intended for special events anddaily use. The adjoining dining room and bar would present an inviting and relaxingatmosphere, which displays a collection of musical and dance memorabilia. A live dj willcoordinate the events and entertain the patrons with music and games during musicbreaks and off-times.

3. Location, location, location -- One of the major advantages that The Nightclub willhave over its competition will be its location in the new, high-profile Your Town Center.

4. Gaming -- The Nightclub will provide several interactive style video games and pool tablesto provide for both additional entertainment and revenue.

5. Quality food -- All would be lost without special attention being paid to the level offood quality. A simple menu offering foods similar to those found at a premier venue.Traditional 'bar' appetizers will be on hand for people craving nachos, wings, or quesadillaswhile they drink and enjoy themselves.

6. Exceptional service -- In order to reach and maintain a unique image of quality, theNightclub will provide attentive and friendly service through a high ratio of servicepersonnel to customers, and will also invest in the training and supervision of itsemployees. We estimate nearly one service staff member for every 35 guests.

2.1 Start-up Summary

The company is seeking a loan for start-up purposes for a new entertainment venue in Waldport.

Funds needed to accomplish goal referenced above will be $x.x million. The applicant willrequire the entire $x.x million to finish project build-out.

We will utilize the anticipated loans in the amount of $x.x million to build out the approximate10,000 square foot space and purchase equipment necessary for the start-up of a new nightclubvenue. The following tables and charts illustrate the capital requirements.

The Nightclub

Page 3

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $485,250

Start-up Assets to Fund $82,500

Total Funding Required $567,750

Assets

Non-cash Assets from Start-up $7,500

Cash Requirements from Start-up $75,000

Additional Cash Raised $0

Cash Balance on Starting Date $75,000

Total Assets $82,500

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabil ities $0

Accounts Payable (Outstanding Bills) $0

Other Current Liabil ities (interest-free) $0

Total Liabil ities $0

Capital

Planned Investment

Investor 1 $250,000

Investor 2 $250,000

Other $67,750

Additional Investment Requirement $0

Total Planned Investment $567,750

Loss at Start-up (Start-up Expenses) ($485,250)

Total Capital $82,500

Total Capital and Liabil ities $82,500

Total Funding $567,750

The Nightclub

Page 4

The Nightclub

Page 5

Table: Start-up

Start-up

Requirements

Start-up Expenses

Air Cond. Upgrade $25,000

Audio/Lighting Lease Payment $2,750

Bar Equipment $9,500

Bar Supply $5,500

Cash Reserves $125,000

Exterior Signage $15,000

Fees and Permits $35,000

FFE $75,000

Impact Fees $7,500

Initial Marketing $22,500

Interior Refit $45,000

Kitchen Upgrade $12,500

Legal $7,500

Opening Salaries Deposits $25,000

Paper Products $2,500

Point of Sales Systems $35,000

Restroom Upgrade $35,000

Total Start-up Expenses $485,250

Start-up Assets

Cash Required $75,000

Start-up Inventory $7,500

Other Current Assets $0

Long-term Assets $0

Total Assets $82,500

Total Requirements $567,750

2.2 Company Ownership

The Nightclub is a privately-held LLC, the details of which have not been solidified as of the dateof this publication. The LLC consists of three principals DD, HK, BK.

D D holds a BS in business administration from the The State University. He has heldrestaurant management positions for the PepsiCo Corporation. He successfully opened andmanaged two nightclubs, and went on to open other operations including a sports bar. He iscurrently in his fifth year in the hotel industry, where he manages a successful sales department.

HK holds a BA in Industrial Media Management, with a concentration in marketing. She has held afinancial analyst position with Lockheed Martin and L3 Communications for two years.

BK has been managing a staff for eight years. He is currently in his fifth year in the automotiveindustry, where he is a successful finance manager.

3.0 Services

The Nightclub

Page 6

The emergence of the Main Street area of Waldport represents a unique opportunity for a high-energy, dance-themed venue. The development's central location, demographics, and lack ofdirect competition are major advantages to this project. The proposed venue will provide alocal solution to the lack of social atmosphere and live sports venues geared primarily toward the21-35 age group in the Waldport area and will help keep late night entertainment expenditureswithin the localized region.

The new venue will specialize in high-energy themes, a quality video and gaming area, and willoffer beer, wine and an array of liquors and mixed drinks. In addition, the venue will sell non-alcoholic beverages such as soft drinks, juices and bottled water. A "casual" food menuconsisting mostly of appetizers and small entrees ranging in cost from six to nine dollars willalso be available. The initial hours of operation will be 11:00 P.M. to 2:00 A.M., four nights aweek. The establishment will draw primarily from the Waldport market while attracting guestsfrom the area's other surrounding cities and towns.

4.0 Market Analysis Summary

The concept and management of the Nightclub has been well received, and has been offered keyplacement at the center of Waldport's new First & Main Town Center development. Thiscommercial center spans 138 acres and promises an immediate primary trade population of332,000 people with a secondary population of 164,000 people. The Boulevard at the Avenueaverage daily traffic counts are currently 53,000, and will increase to 72,000 by 2003 followingthe Boulevard's connection northward to I-25 in 2001. At the center of the complex will be a16-screen Cinemark and IMAX theater opening March, 2000. The Center's planners having metthe Nightclub's management and have reviewed the concept. They have indicated that theNightclub is "exactly" what they were looking for and wish to place it directly in front of thetheater. The annual projected traffic for what Cinemark is calling their 'flagship' location is 1.4million people, which exceeds their current Tinseltown location at the arena.

The Nightclub will be a 10,000 square foot unit, which will also house the company's corporatebusiness office. The dance club and bar will accommodate 750 people. With Waldport's rapidlygrowing population, the variety of the Nightclub from across the country would create massappeal for all of the Nightclub's customers. The store will be equipped with state-of-the-artaudio and video systems like none other found in Your City. It will serve the need for a truenightclub in Waldport. The general appearance will be clean, open, and pleasing to the customer.The demographics are favorable, with minimal competition from other dance-themed venuesand bars.

4.1 Market Segmentation

We see The Nightclub as appealing to three major market segments. Fortunately, the long, latenight hours of operation help The Nightclub lend itself to multiple segment appeal. Our marketsegmentation scheme allows some room for estimates and nonspecific definitions.

1. Childless Young Professionals--Due to our proximity to the IMAX and Cinemarktheaters, we must appeal to single adults and young couples. Whether it is a group offriends or a couple out to see a movie together, these people need a place to eat/drinkeither before and/or after their movie. These customers will range in age from 27 to 40.The Nightclub will appeal to this category by switching the tempo and entertainment tobe more appealing to adults as it gets later into the evening. We also anticipate a 15%

The Nightclub

Page 7

annual growth rate in tandem with the growth rate of Waldport and through increasedpopularity.

2. College Students--By creating an environment that is appealing to college students, wesecure a natural progression between the high school student and the youngprofessional. Through word of mouth, the Nightclub expects realize an increase of fivepercent annually from this segment.

3. Tourists and Business Travelers--More and more business and travelers and touristsare finding themselves in Waldport every year as is made evident by the increaseddemand and subsequent expansion of the local airport. We plan to reach these peoplethrough direct marketing to local hotel patrons. We anticipate a 20% annual growth ratein this segment. As our relationships grow with the local hotels, so too will the word ofmouth recommendations from the hotel staff as well as the patronizing of ourrestaurant by their families. Our future plan is to publish a simple website in order tocreate awareness to any traveler who wants to take an advanced look at the club beforetheir visit.

The following chart and table outline the target market segments for the Nightclub, and includeannual growth projections.

Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Childless Young Professionals 15% 132,000 151,800 174,570 200,756 230,869 15.00%

College Students 5% 100,000 105,000 110,250 115,763 121,551 5.00%

Tourists/Business Travelers 20% 100,000 120,000 144,000 172,800 207,360 20.00%

Total 13.95% 332,000 376,800 428,820 489,319 559,780 13.95%

The Nightclub

Page 8

4.2 Target Market Segment Strategy

Our strategy is based on serving our niche markets exceptionally well. The nightclubenthusiast, the tourist and business traveler, the local nightclub crowd, the local serviceindustry as well as groups going out together, can all enjoy The Nightclub experience.

The marketing strategy is essential to the main strategy:

· Emphasize exceptional service.· Create awareness of The Nightclub's unique features.· Focus on our target markets.

We must charge appropriately for the high-end, high-quality service and food that we offer.Our revenue structure has to match our cost structure, so the wages we pay and the trainingwe provide to assure superior quality and service must be balanced by the fees we charge.

Part of the superior experience we offer is the simplicity o the menu items. While being unique,they are relatively inexpensive and easy to prepare. While a premium is appropriate for theexperience, the pricing has to be balanced in accordance with what we are serving.

All menu items will be moderately priced. We expect an average guest expenditure of $12.50for beverages and $7.50 for the percentage of our guests who choose to take advantage ofour food menu. Our target customer spends more than the industry average for moderatelypriced establishments. This is due to our creating an atmosphere that encourages longer staysand more spending, while still allowing adequate table turns due to extended hours of appeal.

4.3 Service Business Analysis

High energy and dance themed venues have significantly impacted cities from coast to coast inthe nineties. Los Angeles' Hollywood, New York's Times Square, and Seattle's Pioneer Squareare just a few examples. Entrancing their audiences with high-powered lights, sound, music,and interactive entertainment, these venues are still one of the highest cash flow businesses inthe world. Our localized studies have shown that the average person will spend three to fourhours per weekend in this type of an environment and will spend an average of twenty to fiftydollars in that time frame. As we approach the new millennium, this trend shows no signs ofdeclining.

The typical venue of our style is open from 8:00 P.M. to 2:00 A.M., and within this time frame,the venue can achieve gross revenues anywhere from $3,500 to $25,000, nightly. The primarysources of revenue in a venue of this type are high volume traffic, coupled with comparablynominal spending. In addition to alcohol revenues, we will also generate substantial revenuesfrom food sales that can typically range from seven to ten dollars per person, and admission feesthat range between five and ten dollars per admit.

Entertainment venues in the late 1980's and 1990's focused on high-energy light and sound,multiple source video screens, and participative events. This relatively simple concept is stillquite popular today. However, these concepts have greatly evolved with society. In recentyears this industry has become more sophisticated with the availability of new technology.Larger metropolitan areas have taken this technology to new heights with sound, lighting,video and interactive designs that create an exciting and memorable experience. Fortunately, no

The Nightclub

Page 9

one in Your State area has been a pioneer in this specific segment of the industry as of the dateof this report.

Additionally, the nightclub and bar industry is shifting towards a more entertainment-orientedconcept. Guests of these venues are not only offered a dynamic place to gather and mingle, butalso a place to participate in the entertainment through interactive contests, theme nights,and other events. We intend to heavily utilize entertainment-oriented marketing in an effort towithstand the perpetual shift in trends and cater to as large a client base as possible.

Nightclubs and other drinking establishments rely heavily on their primary suppliers. The primarysuppliers are the various beverage distributors that provide the establishment with both alcoholicand non-alcoholic beverages. The alcoholic beverages (beer, wine, and liquor) are the primarysources of income in this industry. Other beverage suppliers also play a crucial role byproviding non-alcoholic beverages. These are either served alone or mixed with alcohol.

In the area, all major brands of alcoholic beverages are available, in addition to several regionalbrands of beer. Initial research shows that the major distributors in the market have a high ratingin both product availability and delivery.

4.3.1 Main Competitors

The Nightclub competition lies mainly with other casual facilities and less with conventional andchain entertainment establishments. We need to effectively compete with the widely held ideathat you can't get good service anymore, while maintaining the idea that being out can be alot of fun. Our polling has indicated that consumers think of atmosphere, price, and qualityrespectively. Additionally, price was frequently mentioned by pointing out that if the formerconcerns are present then they are willing to pay more for the experience.

Our review of the market concludes that there are four entertainment venues that can beconsidered direct competition to the proposed new venue. We do realize that the proposedvenue will also compete indirectly for every entertainment dollar spent in the Waldport area.

The main competitors of the Nightclub will be:

Club A

Hours of Operation: 5:00 P.M.-2:00 A.M.Wednesday through SaturdayCapacity: 300 Wednesday College Night ($1 beers)-This nightclub appeals to a college crowd seeking cheap drinks.-The club is known for being dingy and dirty.

Bar B

Hours of Operation: 10:00 A.M.- 2:00 A.M.Monday through SundayCapacity: 400Thursday College/Ladies Nights-This club appeals to 25-35 year olds.-Pool and video games are central focus.-Dancing is pushed to the back of the club.

The Nightclub

Page 10

Grill C

Hours of Operation: 6:00 P.M.-2:00 A.M.Wednesday through SaturdayCapacity: 250-This club's target customer is 25 to 45 years old / middle class or above.-This club is known for its older, dressed up crowd and cramped space.

Club D

Hours of Operation: 11:00 A.M.-2:00 A.M.Monday through SundayCapacity: 350 -This club's target customer is 25 to 45 years old.-This club is known for live jazz and blues entertainment and their draught beers.

4.3.2 Business Participants

The Nightclub will be part of the restaurant and bar industry, which includes several kinds ofbusinesses:

· Locally Operated Bars and Nightclubs - This genre usually appeals to the localneighborhood clientele. This same client base dictates that the average price structurebe drastically scaled down in order to create "regulars."

· Nightclub Entertainment Complexes - This type of complex represents the conceptwe will most closely compete with. They are typically placed in high traffic locationsand are normally treated as destination entertainment. An admission charge is usually inplace and the associated price structure is also most like our proposed structure.Thankfully there is not an abundance if this type of entertainment within our region.

· Conventional Dining - Primarily owned by large national chains, usually less than 10,000square feet, focused on serving good quality food in a reasonable amount of time in adining room setting. The service and food quality are superior to that of a fast foodestablishment. People go there to eat and leave when they're done eating since there'srarely a reason to stay.

· Formal Dining - Similar to conventional dining yet offering a higher quality of food andservice for the added expense. As with the conventional dining facilities, there is littleinteraction and when people are done eating, they leave.

· Casual Dining - Commonly building upon conventional dining with the addition of a bar,playing of music and sporting events on numerous televisions. Some establishmentsoffer their own brand of beer made on the premises. The food quality and service are atbest, similar to that found in a conventional dining experience.

· Chain Entertainment - Typically manifested in each market through the Hard RockCafes, the Planet Hollywoods, etc. We expect to create an atmosphere that thrives onits trendy feel. These chain entertainment venues can not hope to draw the same "hip"clientele.

The Nightclub

Page 11

5.0 Strategy and Implementation Summary

In order to place emphasis on exceptional service, our main tactics are bi-monthly servicetraining, employee recognition, and higher service employee to customer ratios. Our specificprograms for training include employee for life training for management, customer for lifetraining for employees, and the sharing of success stories among employees and management.Our specific employee recognition programs include employee of the month with a personalparking space, service excellence recognition awards of specific employees attached toadvertising. To achieve higher service employee to customer ratios, we include separatebeverage servers and bussing personnel, as well as maintaining a comfortable table count for thewait staff.

Our second strategy is emphasizing entertainment. The tactics are interactive entertainment,constant sensory appeal, and unique event viewing. Our specific programs for interactiveentertainment and constant sensory appeal are frequent contests, games, music, and karaoke allhosted by an in-house dj who is also in charge of event programming for the main room andlounge. A billiard room will overlook the main area. Billiards was selected due to its widespreadpopularity (fifth most popular sport in the world, according to CNN). A limited number of videoand pinball games, as well as computer dart boards, will compliment the billiard tables in orderto offer a less interactive entertainment option. With an adjoining bar and plenty of seating,yet another unique experience could be carved out of a visit to The Nightclub.

Our promise fulfillment strategy may be our most important. The necessary tactics are ongoingvalue-based training, maintenance, and attention to detail, especially after popularity has beenestablished. Through empowerment of service employees to solve problems without making acustomer wait for management consultation we create a win-win situation for the customerand the restaurant. Continuous and never-ending improvement is the order of the day throughour regular training sessions and meetings. Since value is equal to service rendered minus theprice charged, it is crucial to go beyond the mere serving of food in a room full of lights andsound, you have to create a long-lasting impression.

· Emphasize exceptional service -- We MUST prove to guests that exceptional service isstill available and should be expected as part of a dining experience. We need todifferentiate ourselves from the mediocre service venues.

· Emphasize an entertaining experience -- By assuring that all guests will enjoy themselves,we would be securing market share through repeat business.

· Focus on target markets -- Our marketing and themes of mass appeal and music basedentertainment will attract our target market segments.

· Differentiate and fulfill the above promises.

We can't just market and sell another dance club, we must actually deliver on our promise ofquality, service and a unique guest experience. We need to make sure we have the fun andservice intensive staff that we claim to have.

5.1 Marketing Strategy

A high growth area, such as Waldport, has an annual influx of new residents from many otherparts of the country. This trend is true of Your State in general.

Many new residents, as well as many existing ones, are members of clubs in other markets.

The Nightclub

Page 12

The Nightclub is a place for all. The enabling technology will be an inherent part of TheNightclub's image.

Advertising budgets and event promotion are ongoing processes of management geared topromote the brand name and keep the Nightclub at the forefront of the dance themeestablishments in Waldport's marketing area.

We depend on radio advertising as our main way to reach new customers. Our strategies andpractices will remain constant, as will the way we promote ourselves:

· Advertising -- We'll be developing a core positioning message.· Grand Opening -- We will concentrate a substantial portion of our early advertising

budget towards the 'Grand Opening Event.'· Direct Marketing -- We'll directly market to local hotels surrounding the powers and the

local airport.

The Nightclub will create an identity-oriented marketing strategy with executions particularly inradio media, alongside print ads, and in-store promotions.

A grand opening event will be held to launch The Nightclub in the summer of 2001. A radioadvertising blitz will precede the event for three weeks, with ambiguous teasers about an "eventlike no other" in the city's history and the forthcoming opening date. Contests will be held on thetarget radio stations giving away V.I.P. passes (coupons) to the event while at the same time,creating excitement about the opening. We will leverage our relationship with the DallasCowboy Cheerleaders to be present on the night of the grand opening. The opening date istentative at this point and dependent upon construction completion. The budget for the eventwill be $10,000, and the milestone date will parallel the available opening date, currently Juneof 2001.

Achievement of the following campaigns will be measured by the polling of customers as to howthey heard of The Nightclub for the first ninety days of operation. Budget adjustments will bemade as the results dictate.

We will be running regular local radio and newspaper ads to create brand awareness. Our radioads will be concentrated strongly on Magic FM, the city's top radio station among our targetmarket segments. Through commercial repetition, a teaser campaign, and the use of catchyphrases, we hope to obtain intellectual ownership of our target market segments: when theythink dance club and bar they'll have to think the Nightclub. Drink specials will also be staplesof our radio advertising in order to bring people in. HK will be responsible for ongoing radio adswith a monthly budget of $12,000 per month for the first ninety days, followed by an ongoingbudget of $6500 per month.

We will advertise directly to local hotel guests in the local airport and surrounding theBoulevard areas to attract business travelers and tourists with no knowledge of where to go inthe evening. Through the use of fliers and table tents to place in hotel rooms, we hope to createvisitor awareness of our location and event promotion. Promos such as 'show your room keyand get a free drink' in conjunction with the room ads would be relatively inexpensive from anadvertising standpoint and requires limited ongoing maintenance and expense. BK will beresponsible for direct advertising with a start-up budget of $3,000 and a maintenance budgetof $1,000 per month. The milestone date will be thirty days after the grand opening event.

Ads will also go into the college newspapers for the local campuses of Your State College andthe University of Your State. HK will be responsible for this program. The monthly budget for

The Nightclub

Page 13

these ads will be $300. The event date will be in tandem with the grand opening.

Shirts, ball caps, and bumper stickers bearing the Nightclub's logo will be marketed, as well asgiven away as prizes, in order to further spread brand awareness. Artistic design will be HK'sresponsibility and merchandising will be headed by DD. A start-up budget of $1800 will be inplace and a monthly promotional (giveaway) budget will also exist.

5.2 Sales Strategy

Sales projections for this plan are presented in the following topics.

5.2.1 Sales Forecast

This chart represents our forecast for Income on a monthly basis. The table presents yearlyexpected sales. Complete monthly forecast figures for the first year are presented in theappendix.

Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3

Sales

Beverage Sales $1,346,100 $1,480,710 $1,628,781

Food Sales $93,500 $102,850 $113,135

Admission Sales $836,740 $920,414 $1,012,455

Total Sales $2,276,340 $2,503,974 $2,754,371

Direct Cost of Sales Year 1 Year 2 Year 3

Beverage Sales $336,525 $370,178 $407,196

Food Sales $30,855 $33,941 $37,335

Admission Sales $0 $0 $0

Subtotal Direct Cost of Sales $367,380 $404,119 $444,531

The Nightclub

Page 14

5.2.2 Daily Revenue Forcast

This table illustrates our daily revenue forecast for X,xxx total square feet.

We are assuming a seating capacity for said space of XXX guests. In addition, we expect just

The Nightclub

Page 15

less than one complete rotation of this space for food and beverage guests alike.

DailyRevenueBreakdown**

Mon Tue Wed Thu Fri Sat Sun Weekly

TotalGuestsChargedAdmission

0 0 325 475 675 775 0 2,250

AverageAdmissionFee

$7 $7 $7 $10 $10 $10 $7 $9.57

TotalAdmissionSales

$0 $0 $2,275 $4,750 $6,750 $7,750 $0 $21,525

Total BarGuests

0 0 350 550 775 1,100 0 2,775

AverageDrinksper Person

0 3 3 3 3 3 3 3.25

AverageBeverageSales perGuest

$12.50 $12.50 $10.00 $12.50 $12.50 $12.50 $12.50 $12.18

AveragePrice perDrink

$0 $3.75 $3.75 $3.75 $3.75 $3.75 $3.75 $3.75

TotalBeverageSales

$0 $0 $3,500 $6,875 $9,688 $13,750 $0 $33,812

TotalAdmissionandBeverageSales

$0 $0 $5,775 $11,625 $16,438 $21,500 $0 $55,337

TotalFoodGuests

0 0 30 50 70 100 0 250

AverageFoodSales perGuest

$5.00 $5.00 $7.50 $7.50 $7.50 $7.50 $5.00 $45.00

TotalFood Sales

$0 $0 $225 $375 $525 $750 $0 $1,875

Misc.Sales (10%of GrossSales)

$0 $0 $578 $1,163 $1,644 $2,150 $0 $5,533

TotalRevenue

$0 $0 $6,578 $13,163 $18,606 $24,400 $0 $62,746

**based on 750-person capacity

6.0 Management Summary

The management team is an especially close one. One of the presidents has been married to

The Nightclub

Page 16

the vice president for seven years. The two co-presidents have worked directly together forthree and a half years at four positions. One of the presidents has worked with the barmanager in the past and has known him for nearly ten years. Together we share a singlevision: to provide a unique and entertaining experience through exceptional service.

The company will have six managers, including the two presidents, and three managers whohave yet to be recruited.

6.1 Management Team

DD, Co-President. D has a bachelors degree in business management, five years management inthe restaurant/bar business, consultative experience opening other bars, six subsequent yearsmanagement in the car industry ending currently with his current position as departmentmanager. D's specific responsibilities will lie primarily with the coordination of events andoversight of the operations and evening activities of the restaurant and bar.

BK, Co-President. B is pursuing a life-long ambition of restaurant/nightclub ownership. Threeyears of restaurant kitchen experience and nearly eight years of experience managing peopleending with three and a half years of finance management. B is committed to not only creating asuccessful business but also successfully running it. Even though his hands-on experience inbusiness management is extensive through the finance business, he has spent the last yearand a half researching business and business ownership in his spare time. B's specificresponsibilities will be administrative management to include inventory management, accountspayable, purchasing, payroll, and public relations with limited marketing involvement (mostlydirect) to other companies.

HK, Vice President. H has a bachelor's degree in industrial media management. Her experienceranges from radio marketing sales to three years as a financial analyst for L3 Communications. His a born leader to whom people of all levels flock. H's responsibilities will be limited tomarketing with local radio and newspaper and her day-to-day role in the restaurant will be amostly silent one.

MC, Bar Manager. M has more than fifteen years bartending and bar managementexperience. M is eagerly awaiting the opportunity to work at a restaurant/bar where things aredone correctly and the customer is put first. In addition to managing the bar, its personnel,and the djs, M will also be third in command under the two co-presidents.

The positions of office, kitchen and dining room managers have yet to be filled at this time.These positions will be openly sought along with the remainder of the staff.

6.2 Management Team Gaps

We believe we have a solid team constructed in order to cover the main points of the businessplan. Management growth through training will be an ongoing component of The Nightclub'spriorities.

However, we do realize that we may not have the hands on specific knowledge that may berequired to execute pre-opening and opening phases of the venture. We also realize that wemay benefit greatly from the retention of a hospitality industry consultant to guide us throughthe aforementioned time frames, as well as to consult with us through the first two years of

The Nightclub

Page 17

our operation.

To this end we have contracted with a hospitality industry specialist consultant. His involvementwill exist in several facets, most notably, through providing assistance in launching thisvenue. This consultant has over 12 years of experience in the hospitality industry and hasassisted many first-time operators in getting their proposed venueslaunched successfully. They will assist in the development of the design, concept, and strategiesof the new business. In addition, they will assist in the hiring process of the managementstaff, DJs, bartenders, waitresses, and security staff. They will also provide educational servicesfor management-level personnel who will be responsible for the day-to-day operations of theclub.

Interviews for a general manager, operations manager, and all other personnel will beconducted with the assistance of the consultant. The co-presidents, Mr. D and Mr. K, will makefinal decisions for each position.

These gaps will be filled as the opening date draws closer.

6.3 Personnel Plan

The Personnel Plan reflects the objective of providing an ample amount of service personnel. Ourheadcount will remain at thirty unless any unforeseen demands dictate otherwise. Assume aburden rate of 17%.

DAILY STAFFING (750-person capacity)Hourly Employees

The Nightclub

Page 18

Day Position Quantity Rate Avg Hrs Sub-total Burden Total

Monday Staff Cost/Mon.

0 $0 0 $0 $0 $0

- - -- - - - - -

Tuesday Staff Cost/Tues.

- - - $0 $0 $0

- - -- - - - - -

Wednesday Waitress 2 $5.00 7.5 $75 - -

- Security 4 $7.00 6.5 $195 - -

- Bartender 2 $5.00 7.5 $75 - -

- Barback 1 $4.50 7 $31 - -

- Police Detail 1 $15.00 0 $0 - -

- Misc. - $8.00 0 $0 - -

- Staff Cost/Wed.

- - - $376 $64 $441

- - - - - - - -

Thursday Waitress 3 $5.00 7.5 $113 - -

- Security 5 $7.50 6.5 $244 - -

- Bartender 3 $5.00 7.5 $113 - -

- Barback 1.5 $4.50 7 $47 - -

- Police Detail 0 $15.00 0 $0 - -

- Misc. 0 $15.00 0 $0 - -

- Staff Cost/Thur.

- - - $516 $88 $604

- - - - - - - -

Friday Waitress 4 $5.00 7.5 $150 - -

- Security 7 $7.50 6.5 $341 - -

- Bartender 4 $5.00 7.5 $150 - -

- Barback 2 $4.50 7 $63 - -

- Police Detail 0 $15.00 0 $0 - -

- Misc. 0 $15.00 0 $0 - -

- Staff Cost/Fri.

- - - $704 $120 $824

- - - - - - - -

Saturday Waitress 4 $5.00 7.5 $150 - -

- Security 9 $7.50 6.5 $439 - -

- Bartender 5 $5.00 7.5 $188 - -

- Barback 2 $4.50 7 $63 - -

- Police Detail 0 $15.00 0 $0 - -

- Misc. 0 $15.00 0 $0 - -

- Staff Cost/Sat.

- - - $839 $143 $982

- - - - - - - -

Sunday Staff Cost/Sun.

0 $0 0 $0 $0 $0

Ttl Wkly/Hrly

- - - - $2,436 $414 $2,850

Salaried Staff

The Nightclub

Page 19

Position Salary Yearly Weekly Burden Total

Manager #1 Oper Prtnr $55,000 $877 $179 -

Manager #2 Oper Prtnr $55,000 $877 $179 -

Manager #3 General Mgr $50,000 $798 $163 -

Manager #4 PR Mgr $45,000 $718 $147 -

Manager #5 Bar Mgr $35,000 $558 $114 -

Manager #6 Asst. $25,000 $399 $81 -

Entertainmnt DJ $65,000 - - -

Ttl Salaried - - $5,480 $866 $6,346

Ttl Weekly Staff - - - - $9,196

Table: Personnel

Personnel Plan


Salaried Staff $284,736 $298,968 $313,916

Hourly Staff $107,200 $112,560 $118,188

Total People 0 0 0

Total Payroll $391,936 $411,528 $432,104

7.0 Financial Plan

The financial projections for this plan are presented in the tables and charts of the followingsubtopics.

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are illustrated in thefollowing table.

The key underlying assumptions are:

· We assume a slow-growth economy of five percent the first year, and three percentthereafter, without major recession.

· We assume that we will grow as managers during the process, this growth will manifestitself as flat line expense growth over the five-year period, leading to increased annualcash flow.

· We assume access to equity capital and financing sufficient to maintain our financialplan as shown in the tables.

· We assume continued popularity of nightclubs in America and the growing demand forhigh-energy themed and casual dining venues.

The Nightclub

Page 20

Table: General Assumptions

General Assumptions


Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0

7.2 Break-even Analysis

Example Break-Even Analysis formulas are presented in the text below. Business PlanPro's interactive table and chart are still linked to the program spreadsheets.

Fixed Costs $X,xxx,xxxVariable Costs $Xxx,xxxRevenue (Estimated)$X,xxx,xxx

*S = Gross Sales

S = $ + [($Xxx,xxx/ $X,xxx,xxx) x S]

S = $X,xxx,xxx + [(.xxxx) x S]

S = $X,xxx,xxx

Break Even Point = $X,xxx,xxx

Average Nightly Break Even Revenues – approximately $ X,xxxMinimum Nightly Required Spending Per Person - $8.75 + $9.75 = $18.50

Minimum Nightly Required Incoming Traffic – Xxx

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $140,703

Assumptions:

Average Percent Variable Cost 16%

Estimated Monthly Fixed Cost $117,995

The Nightclub

Page 21

7.3 Projected Profit and Loss

Projected profit and loss statement for the nightclub follows. Three years' annual totals areshown below. Monthly breakdown for year one appears in the appendix.

The Nightclub

Page 22

The Nightclub

Page 23

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $2,276,340 $2,503,974 $2,754,371

Direct Cost of Sales $367,380 $404,119 $444,531

Other Production Expenses $0 $0 $0

Total Cost of Sales $367,380 $404,119 $444,531

Gross Margin $1,908,960 $2,099,855 $2,309,840

Gross Margin % 83.86% 83.86% 83.86%

Expenses

Payroll $391,936 $411,528 $432,104

Sales and Marketing and Other Expenses $411,576 $430,574 $451,284

Depreciation $0 $0 $0

Fees--Credit Card $10,764 $10,982 $11,202

Fees--Professional $7,500 $7,650 $7,803

Taxes--Admission $0 $0 $0

Taxes--Excise $391,536 $399,368 $407,355

Taxes--Property $0 $0 $0

Leased Equipment $2,496 $2,550 $2,601

Util ities $36,000 $36,720 $37,454

Insurance $22,500 $22,950 $23,409

Rent $75,000 $75,000 $76,500

Payroll Taxes $66,629 $69,960 $73,458

Other $0 $0 $0

Total Operating Expenses $1,415,937 $1,467,282 $1,523,170

Profit Before Interest and Taxes $493,023 $632,573 $786,670

EBITDA $493,023 $632,573 $786,670

Interest Expense $0 $0 $0

Taxes Incurred $121,122 $158,143 $199,945

Net Profit $371,901 $474,430 $586,725

Net Profit/Sales 16.34% 18.95% 21.30%

The Nightclub

Page 24

7.4 Projected Cash Flow

The following chart illustrates our monthly cash flow for year one. The table shows three yearsof annual totals. First year monthly figures as presented in the appendix. The months areweighted according to the amount of weeks in that month in a typical calendar year.

The Nightclub

Page 25

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $2,048,706 $2,253,577 $2,478,934

Cash from Receivables $205,193 $248,153 $272,969

Subtotal Cash from Operations $2,253,899 $2,501,730 $2,751,903

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $0 $0 $0

New Other Liabil ities (interest-free) $0 $0 $0

New Long-term Liabil ities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $2,253,899 $2,501,730 $2,751,903

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $391,936 $411,528 $432,104

Bill Payments $1,445,416 $1,583,120 $1,731,944

Subtotal Spent on Operations $1,837,352 $1,994,648 $2,164,048

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabil ities Principal Repayment $0 $0 $0

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $1,837,352 $1,994,648 $2,164,048

Net Cash Flow $416,547 $507,082 $587,855

Cash Balance $491,547 $998,629 $1,586,484

The Nightclub

Page 26

7.5 Projected Balance Sheet

The following Balance Sheet indicates healthy growth of net worth and a strong financialposition. The monthly estimates are included in the appendix.

Table: Balance Sheet

Pro Forma Balance Sheet


Assets

Current Assets

Cash $491,547 $998,629 $1,586,484

Accounts Receivable $22,441 $24,685 $27,153

Inventory $12,653 $40,820 $44,902

Other Current Assets $0 $0 $0

Total Current Assets $526,640 $1,064,134 $1,658,539

Long-term Assets

Long-term Assets $0 $0 $0

Accumulated Depreciation $0 $0 $0

Total Long-term Assets $0 $0 $0

Total Assets $526,640 $1,064,134 $1,658,539

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabil ities

Accounts Payable $72,239 $135,303 $142,983

Current Borrowing $0 $0 $0

Other Current Liabil ities $0 $0 $0

Subtotal Current Liabil ities $72,239 $135,303 $142,983

Long-term Liabil ities $0 $0 $0

Total Liabil ities $72,239 $135,303 $142,983

Paid-in Capital $567,750 $567,750 $567,750

Retained Earnings ($485,250) ($113,349) $361,081

Earnings $371,901 $474,430 $586,725

Total Capital $454,401 $928,831 $1,515,556

Total Liabil ities and Capital $526,640 $1,064,134 $1,658,539

Net Worth $454,401 $928,831 $1,515,556

The Nightclub

Page 27

7.6 Business Ratios

The Ratios table below outlines important ratios for this Nightclub. The last column, IndustryProfile, is derived from the Standard Industrial Classification (SIC) Index code 5813, for DrinkingPlaces.

The Nightclub

Page 28

Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth n.a. 10.00% 10.00% 1.90%

Percent of Total Assets

Accounts Receivable 4.26% 2.32% 1.64% 4.60%

Inventory 2.40% 3.84% 2.71% 3.10%

Other Current Assets 0.00% 0.00% 0.00% 44.60%

Total Current Assets 100.00% 100.00% 100.00% 52.30%

Long-term Assets 0.00% 0.00% 0.00% 47.70%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabil ities 13.72% 12.71% 8.62% 28.20%

Long-term Liabil ities 0.00% 0.00% 0.00% 23.10%

Total Liabilities 13.72% 12.71% 8.62% 51.30%

Net Worth 86.28% 87.29% 91.38% 48.70%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 83.86% 83.86% 83.86% 42.30%

Selling, General & Administrative Expenses 67.36% 64.67% 62.20% 23.40%

Advertising Expenses 8.79% 8.39% 8.01% 2.40%

Profit Before Interest and Taxes 21.66% 25.26% 28.56% 2.80%

Main Ratios

Current 7.29 7.86 11.60 1.14

Quick 7.12 7.56 11.29 0.74

Total Debt to Total Assets 13.72% 12.71% 8.62% 51.30%

Pre-tax Return on Net Worth 108.50% 68.10% 51.91% 5.20%

Pre-tax Return on Assets 93.62% 59.44% 47.43% 10.60%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 16.34% 18.95% 21.30% n.a

Return on Equity 81.84% 51.08% 38.71% n.a

Activity Ratios

Accounts Receivable Turnover 10.14 10.14 10.14 n.a

Collection Days 59 34 34 n.a

Inventory Turnover 10.89 15.12 10.37 n.a

Accounts Payable Turnover 21.01 12.17 12.17 n.a

Payment Days 27 23 29 n.a

Total Asset Turnover 4.32 2.35 1.66 n.a

Debt Ratios

Debt to Net Worth 0.16 0.15 0.09 n.a

Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios

Net Working Capital $454,401 $928,831 $1,515,556 n.a

Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios

Assets to Sales 0.23 0.42 0.60 n.a

Current Debt/Total Assets 14% 13% 9% n.a

Acid Test 6.80 7.38 11.10 n.a

Sales/Net Worth 5.01 2.70 1.82 n.a

The Nightclub

Page 29

Dividend Payout 0.00 0.00 0.00 n.a

Appendix

Page 1

Table: Sales Forecast

Sales Forecast

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Sales

Beverage Sales 0% $44,600 $77,100 $96,300 $131,700 $152,800 $167,100 $165,700 $155,200 $134,900 $108,500 $76,800 $35,400

Food Sales 0% $4,900 $6,300 $7,100 $7,900 $9,100 $9,900 $10,000 $9,400 $8,700 $7,500 $6,600 $6,100

Admission Sales 0% $34,100 $56,800 $74,600 $76,900 $75,100 $82,900 $88,440 $87,000 $82,400 $74,200 $60,400 $43,900

Total Sales $83,600 $140,200 $178,000 $216,500 $237,000 $259,900 $264,140 $251,600 $226,000 $190,200 $143,800 $85,400

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Beverage Sales 25% $11,150 $19,275 $24,075 $32,925 $38,200 $41,775 $41,425 $38,800 $33,725 $27,125 $19,200 $8,850

Food Sales 33% $1,617 $2,079 $2,343 $2,607 $3,003 $3,267 $3,300 $3,102 $2,871 $2,475 $2,178 $2,013

Admission Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $12,767 $21,354 $26,418 $35,532 $41,203 $45,042 $44,725 $41,902 $36,596 $29,600 $21,378 $10,863

Appendix

Page 2

Table: Personnel

Personnel Plan


Salaried Staff 0% $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728

Hourly Staff 0% $5,100 $8,700 $9,400 $9,500 $9,900 $10,600 $10,900 $10,700 $9,500 $8,500 $7,600 $6,800

Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $28,828 $32,428 $33,128 $33,228 $33,628 $34,328 $34,628 $34,428 $33,228 $32,228 $31,328 $30,528

Appendix

Page 3

Table: General Assumptions

General Assumptions


Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0

Appendix

Page 4

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $83,600 $140,200 $178,000 $216,500 $237,000 $259,900 $264,140 $251,600 $226,000 $190,200 $143,800 $85,400

Direct Cost of Sales $12,767 $21,354 $26,418 $35,532 $41,203 $45,042 $44,725 $41,902 $36,596 $29,600 $21,378 $10,863

Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $12,767 $21,354 $26,418 $35,532 $41,203 $45,042 $44,725 $41,902 $36,596 $29,600 $21,378 $10,863

Gross Margin $70,833 $118,846 $151,582 $180,968 $195,797 $214,858 $219,415 $209,698 $189,404 $160,600 $122,422 $74,537

Gross Margin % 84.73% 84.77% 85.16% 83.59% 82.61% 82.67% 83.07% 83.35% 83.81% 84.44% 85.13% 87.28%

Expenses

Payroll $28,828 $32,428 $33,128 $33,228 $33,628 $34,328 $34,628 $34,428 $33,228 $32,228 $31,328 $30,528

Sales and Marketing and Other

Expenses

$34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Fees--Credit Card $897 $897 $897 $897 $897 $897 $897 $897 $897 $897 $897 $897

Fees--Professional $625 $625 $625 $625 $625 $625 $625 $625 $625 $625 $625 $625

Taxes--Admission $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Taxes--Excise $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628

Taxes--Property $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Leased Equipment $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208

Utilities $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Insurance $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875

Rent $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250

Payroll Taxes 17% $4,901 $5,513 $5,632 $5,649 $5,717 $5,836 $5,887 $5,853 $5,649 $5,479 $5,326 $5,190

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $113,510 $117,722 $118,541 $118,658 $119,126 $119,945 $120,296 $120,062 $118,658 $117,488 $116,435 $115,499

Profit Before Interest and Taxes ($42,677) $1,124 $33,041 $62,310 $76,671 $94,913 $99,119 $89,636 $70,746 $43,112 $5,987 ($40,962)

EBITDA ($42,677) $1,124 $33,041 $62,310 $76,671 $94,913 $99,119 $89,636 $70,746 $43,112 $5,987 ($40,962)

Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Taxes Incurred ($12,803) $281 $8,260 $15,578 $19,168 $23,728 $24,780 $22,409 $17,687 $10,778 $1,497 ($10,240)

Net Profit ($29,874) $843 $24,781 $46,733 $57,503 $71,185 $74,339 $67,227 $53,060 $32,334 $4,490 ($30,721)

Net Profit/Sales -35.73% 0.60% 13.92% 21.59% 24.26% 27.39% 28.14% 26.72% 23.48% 17.00% 3.12% -35.97%

Appendix

Page 5

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $75,240 $126,180 $160,200 $194,850 $213,300 $233,910 $237,726 $226,440 $203,400 $171,180 $129,420 $76,860

Cash from Receivables $0 $279 $8,549 $14,146 $17,928 $21,718 $23,776 $26,004 $26,372 $25,075 $22,481 $18,865

Subtotal Cash from Operations $75,240 $126,459 $168,749 $208,996 $231,228 $255,628 $261,502 $252,444 $229,772 $196,255 $151,901 $95,725

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received $75,240 $126,459 $168,749 $208,996 $231,228 $255,628 $261,502 $252,444 $229,772 $196,255 $151,901 $95,725

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations

Cash Spending $28,828 $32,428 $33,128 $33,228 $33,628 $34,328 $34,628 $34,428 $33,228 $32,228 $31,328 $30,528

Bill Payments $3,040 $92,029 $116,684 $126,358 $146,749 $152,323 $158,484 $154,558 $146,407 $133,345 $117,309 $98,130

Subtotal Spent on Operations $31,868 $124,457 $149,812 $159,586 $180,377 $186,651 $193,112 $188,986 $179,635 $165,573 $148,637 $128,658

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $31,868 $124,457 $149,812 $159,586 $180,377 $186,651 $193,112 $188,986 $179,635 $165,573 $148,637 $128,658

Net Cash Flow $43,372 $2,002 $18,937 $49,410 $50,851 $68,977 $68,391 $63,458 $50,137 $30,682 $3,264 ($32,933)

Cash Balance $118,372 $120,374 $139,311 $188,720 $239,571 $308,548 $376,939 $440,397 $490,534 $521,216 $524,480 $491,547

Appendix

Page 6

Table: Balance Sheet

Pro Forma Balance Sheet


Assets Starting Balances

Current Assets

Cash $75,000 $118,372 $120,374 $139,311 $188,720 $239,571 $308,548 $376,939 $440,397 $490,534 $521,216 $524,480 $491,547

Accounts Receivable $0 $8,360 $22,101 $31,353 $38,857 $44,628 $48,900 $51,538 $50,694 $46,921 $40,867 $32,766 $22,441

Inventory $7,500 $14,044 $23,489 $29,060 $39,085 $45,323 $49,546 $49,198 $46,092 $40,256 $32,560 $23,516 $12,653

Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Current Assets $82,500 $140,776 $165,965 $199,723 $266,662 $329,523 $406,994 $477,674 $537,183 $577,711 $594,643 $580,762 $526,640

Long-term Assets

Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Assets $82,500 $140,776 $165,965 $199,723 $266,662 $329,523 $406,994 $477,674 $537,183 $577,711 $594,643 $580,762 $526,640

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities

Accounts Payable $0 $88,150 $112,495 $121,473 $141,679 $147,036 $153,323 $149,663 $141,945 $129,413 $114,011 $95,639 $72,239

Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Current Liabilities $0 $88,150 $112,495 $121,473 $141,679 $147,036 $153,323 $149,663 $141,945 $129,413 $114,011 $95,639 $72,239

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Liabilities $0 $88,150 $112,495 $121,473 $141,679 $147,036 $153,323 $149,663 $141,945 $129,413 $114,011 $95,639 $72,239

Paid-in Capital $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750

Retained Earnings ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250)

Earnings $0 ($29,874) ($29,031) ($4,250) $42,483 $99,986 $171,171 $245,511 $312,738 $365,798 $398,132 $402,622 $371,901

Total Capital $82,500 $52,626 $53,469 $78,250 $124,983 $182,486 $253,671 $328,011 $395,238 $448,298 $480,632 $485,122 $454,401

Total Liabilities and Capital $82,500 $140,776 $165,965 $199,723 $266,662 $329,523 $406,994 $477,674 $537,183 $577,711 $594,643 $580,762 $526,640

Net Worth $82,500 $52,626 $53,469 $78,250 $124,983 $182,486 $253,671 $328,011 $395,238 $448,298 $480,632 $485,122 $454,401

business plan of a nightclub

Documents